Abbott Gets Tough with Thailand

In response to Thailand’s decision to issue compulsory licenses for Kaletra and for Plavix, effectively bypassing their patents by purchasing generic versions from India, Abbott has responded by redusing to launch any new drugs in Thailand.

As I discussed in an earlier post, price controls and compulsory licensing give buyers more power … for a price. This places many countries in a catch-22 situation where they do not have the resources to pay full price for patented drugs, but if they exercise their legal rights to issue compulsory licenses (valid under TRIPS in a health crisis) they face retaliation from innovative drug companies. While Abbott’s initial stance may be a negotiation tool to compromise on a median price, the impact of losing access to innovative new medicines can be severe.